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Cablegate: Goc Arrests Alleged Pyramid Ringleaders Amid

VZCZCXYZ0001
PP RUEHWEB

DE RUEHBO #4201/01 3262102
ZNR UUUUU ZZH
P 212102Z NOV 08
FM AMEMBASSY BOGOTA
TO RUEHC/SECSTATE WASHDC PRIORITY 5687
INFO RUEHBR/AMEMBASSY BRASILIA 8512
RUEHCV/AMEMBASSY CARACAS 1345
RUEHZP/AMEMBASSY PANAMA 2694
RUEHQT/AMEMBASSY QUITO 7454
RUEHPE/AMEMBASSY LIMA 6760
RUEHLP/AMEMBASSY LA PAZ NOV SOUTHCOM MIAMI FL
RUEAWJC/DEPT OF JUSTICE WASHDC
RUEABND/DEA HQS WASHDC
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS BOGOTA 004201

SENSITIVE
SIPDIS

TREASURY FOR FINCEN MSWANSON; EEB/ESC/TFS FOR JJALORINA

E.O. 12958: N/A
TAGS: EFIN ETTC PTER KCRM SNAR PGOV CO
SUBJECT: GOC ARRESTS ALLEGED PYRAMID RINGLEADERS AMID
PROTEST; BEGINS ASSET RETURN TO VICTIMS

REF: BOGOTA 4134

1. (SBU) SUMMARY: Amid collapsing pyramid schemes suspected
of defrauding at least 300,000 Colombians (reftel), the GOC
seized DMG Holding Group, S.A., the largest suspected scam in
the country and arrested its founder and principal directors
on charges of money laundering, illicit enrichment, and
fraud. The GOC has initiated a plan for victims of DMG to
file restitution claims for payment, on a sliding scale, from
any recovered assets. Nevertheless, most low income
claimants appear to blame the GOC seizure, rather than
questionable DMG business practices, for the loss of their
savings and several demonstrations against the GOC action
continue around the country. In a series of public
appearances, President Uribe has defended the closure and
arrests for staving off worse losses and shutting down a
major money laundering operation for narcotics funds. END
SUMMARY.

DMG Ringleaders Taken Down
--------------------------

2. (SBU) Following the November 17 closure of all DMG offices
in Colombia, and similar closures of the firm's Quito and
Caracas branches, Panamanian authorities in coordination with
GOC Police arrested DMG founder David Murcia Guzman November
19 and immediately deported him to Colombia. Colombian law
enforcement arrested six other senior DMG officials,
including Murcia's wife, mother, and brother-in-law who had
various DMG assets listed in their names. According to press
reports, two of the DMG directors were arrested carrying more
than USD 500,000. (NOTE: Embassy Bogota Consular Section has
entered lookouts for the announced arrestees and revoked the
visas of five of those who had valid visas. END NOTE.)

3. (SBU) The National Prosecutor's office based the arrests
on evidence derived from more than 2,500 phone intercepts
implicating Murcia and the other individuals in fraud, money
laundering, and other crimes. The Police also pulled
evidence from more than 100 computers seized November 16 from
an office that was not listed in DMG public records but,
according to GOC officials, appeared to serve as the
financial nerve center for the company. Murcia and
colleagues are currently incarcerated in separate jails
outside of Bogota, awaiting arraignment.

Claim Process Launched
----------------------

4. (U) Meanwhile the GOC has appointed a caretaker for seized
DMG assets and launched a process for DMG depositors to file
claims to partially recuperate their cash investments from
the liquidation of DMG. After receiving a flood of claimants
at the Financial Superintendent's office the day after DMG's
closure, the GOC decided to move the process to Bogota's El
Campin stadium. Under streamlined rules, depositors can
present themselves in person with copies of their investment
documentation and enroll a claim for restitution from any
seized DMG assets. The expedited process is based on
President Uribe's November 17 State of Emergency decrees and
aims to provide responses to depositors within 20 days.

5. (U) Colombian media reported on November 21 that several
politicians, including Senator Samuel Arrieta, a member of
the Uribe coalition, may have been involved with DMG. The
Fiscalia has not commented on the possible political angle,
but media is rife with speculation that a number of
politicians could be implicated as the para-political scandal
continues.

Many Victims Blame GOC
----------------------

6. (SBU) Despite GOC efforts to assist victims, many blame
the government for wrecking DMG and costing low-income
investors their life savings. Various protests and marches
have occurred since the GOC-imposed closure of DMG on
November 17, including among victims waiting in line to seek
restitution. Police used tear gas to disperse one angry

gathering that blocked a main road in Bogota November 20,
reportedly instigated by individuals wearing DMG shirts and
urging depositors to not participate in the restitution
process.

7. (SBU) President Uribe and other GOC officials vehemently
defend their actions as necessary to prevent further losses
among DMG depositors and halt suspected laundering of illicit
funds. However, as the majority of DMG investors are
low-income Colombians long excluded from the traditional
banking sector by high fees and lending rates, the firm's
closure has exposed socio-economic rifts and placed the GOC
on the defensive with DMG investors while it simultaneously
tries to help them recuperate lost funds. Representative Roy
Barreras told us the DMG scandal and protests could not have
come at a worse time for Uribe, with a too-close-to call
vote pending in the Congress over a resolution to change the
consistution to allow a possible third term for Uribe and the
population spooked over the world financial crisis.
BROWNFIELD

© Scoop Media

 
 
 
 
 
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